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As cold returns, tips for saving on heating costs

NEW YORK (AP) -- This winter is expected to feel like more winter. That means you'll will have to pay more to heat your home.

Last winter was the warmest on record and homeowners may have forgotten where the weather stripping and space heater are stashed. They'll come in handy for the 2012-2013 season, when temperatures are expected to be close to normal.

The price for heating oil, natural gas and other fuel will be relatively stable. But customers will have to use more energy to keep warm, according to the annual Winter Fuels Outlook from the Energy Department's Energy Information Administration.

There are a number of ways to try to make sure your bill doesn't rise quite so fast. If you're a heating oil user, you may want to try all of them.

Heating oil customers are expected to pay the highest prices ever. That will result in record heating bills, an average of $2,494. That's nearly $200 more than the previous high, set in the winter of 2010-2011.

Customers who use natural gas, electricity or propane won't pay as much as they have in typical winters because prices are relatively low. Natural gas users will spend an average of $697 this winter, 13 percent less than the five-year average.

"It's two different worlds. For most families this is still going to be an affordable year, except for those who use oil heat," says Mark Wolfe, the Executive Director of the National Energy Assistance Director's Association. "For them, it's going to be very difficult."

At the same time, funding for low-income heating assistance is falling. Over the last two years, heating assistance funding has been cut to $3.5 billion from $5.1 billion in 2010. The number of households receiving assistance fell by 1.1 million over the period, according to Wolfe.

One obvious way to lower your heating bill to don some fluffy slippers and turn down the thermostat. The Energy Department estimates that a resident can save 1 percent on their heating bill for every degree a thermostat is set back. Here are a few other ways:

— Think of the sun as a heater, and your drapes as a blanket: Open drapes when you are getting direct sunlight, then close them at night to keep heat from escaping.

— Make sure the damper in your fireplace is closed when you aren't using it.

— Keep air vents clean and uncovered so heat can easily flow throughout your home.

— Shut off kitchen fans and bathroom fans as soon as they are no longer needed.

— Lower the temperature of your water heater. That can be done without your shower getting noticeably less steamy.

Many states and utilities offer incentives for home energy audits and home weatherization programs that include things like adding insulation, installing more efficient windows, and replacing an old boiler or furnace with a new one.

These investments can pay for themselves in heating savings in just a few years, especially when energy prices are high.

John Huber, President of the National Oilheat Research Alliance says that customers learned to drastically cut the amount of oil they burned during the 1970s oil crisis and again when prices began to rise sharply in 2007 and 2008.

"Americans really do respond to economic signals," he said.

Switching from oil heat to natural gas can be an expensive project — $5,000 to $10,000, according to Sobieski Services of Wilmington, Del. The price depends on how difficult it is to connect to public lines and remove the old furnace, and how much other infrastructure your house may need. But you could make up the cost in three or four winters at today's prices.

Just 6 percent of the nation's households use heating oil, but they tend to be in some of the coldest parts of the country where heating needs are high, mainly in the Northeast. About half use natural gas for heat and 38 percent use electricity. Five percent of households use propane and 2 percent use wood.

Natural gas prices will average $10.32 per thousand cubic feet. That's 0.8 percent higher than last year but 13 percent lower than the five-year average. Electricity prices will fall 2.3 percent to 11.4 cents per kilowatt hour. Propane prices will fall 8 percent in the Midwest to $2.02 per gallon and 13 percent in the Northeast to $2.95 per gallon.

Heating oil will average a record high of $3.80 per gallon because it is made from crude oil, which has averaged $95.95 per barrel this year.

But most of this year's increase is because forecasters expect a more typical winter. East of the Rockies, weather is expected to be about 2 percent warmer than normal but 20 percent to 27 percent colder than last year. In the West, temperatures were closer to normal last year, so the expected increase for this winter is just 1 percent.